Question 1

Can I use a USDA loan to buy in Berkeley?

Accepted Answer

No. Berkeley is classified as an urban area and does not meet USDA property eligibility requirements. FHA is your option here.

Question 2

Which loan has a lower down payment?

Accepted Answer

USDA requires zero down. FHA requires 3.5% with a 580+ credit score. Both beat conventional loan minimums.

Question 3

Do both loans require mortgage insurance?

Accepted Answer

Yes. FHA charges an upfront fee plus monthly premiums. USDA charges a guarantee fee and annual fee instead.

Question 4

What credit score do I need for each loan?

Accepted Answer

FHA accepts scores as low as 500. Most USDA lenders want 640 or higher. FHA offers more flexibility on credit.

Question 5

Are there income limits for either loan?

Accepted Answer

USDA has strict household income limits. FHA has no income cap — only debt-to-income ratio guidelines matter.

Question 6

Which loan is cheaper long-term in Berkeley?

Accepted Answer

It depends on your rate and loan size. FHA mortgage insurance can be removed by refinancing. Run the numbers with us first.

FHA vs USDA Loans in Berkeley, CA